Monday, February 9, 2015

Dead of Winter

Despite increased Volatility in stocks due to the cessation of Fed's QE steadying hand, almost all Sentiment Indicators are in the neutral, non-extreme range these days. These include (see matrix below) NYSE to NASDAQ Volumes (speculation if OTC is extreme); CBOE put to call option ratio;
VIX -back down to teens; McClellan Oscillator and Summation Indices hanging around zero (a breadth, or Advance/Decline momentum signal); newsletter surveys - both wire newsletters and AAII (individual investor) Bulls vs. Bears; and various Insider selling stuck in a rut. This usually jumps around Income Tax time.

The notable exceptions, again, last week were Gold short sellers in the Commercial Traders' area, which was shown by last week's big drop from $1300 to just above $1200/oz. A Barron's oil analyst notes that the Longs in oil have not yet capitulated into a Selling Climax, and expects oil to reach $20 a barrel - now that's an extreme! 

Finally, for what it's worth the 2-year Treasury yield jumped up to 0.65%, from 0.45% last week - also extreme. Due to the length of this blog - see next blog for numbers- here are the numbers:

With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: for an alternative strategy that is low-risk as well as highly rewarding. For those of you wanting more details and actual trading results, a new book is available for $14.95 at Zero (IN)Tolerance

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